so we can safely store it... where it won't get into the atmosphere. exxonmobil is spending more than 100 million dollars... to build a plant that will demonstrate this process. i'm very optimistic about it... because this technology could be used... to reduce greenhouse gas emissions significantly. ♪ check out, getting close to another high, apple will this morning. credit suisse saying that the price target needs to be $300, in their view, not $275, because the second quarter, stronger

than earlier thought due to up side from the norm for apple. we're surprised by the current strength and it's running well ahead of expectations in all key business segments. at $226, its market cap is $205 billion. ge briefly got up to $200 a couple of times yesterday and the day before. back to $195. but apple, $10 billion more market cap in apple than general electric. >> wow. >> i've had, just a couple weeks -- april 3rd, i think. are you going to get one? >> and you, who listens to coldplay, admitted that you had a dream about buying an ipad. >> i was in a store and she was trying to convince me to buy. that's how -- >> you're dreaming about the ipad. that's how -- lame is one word. >> i won't tell you anything ever again because you may say it on television. >> lame is one word for it, yeah. i could think of a few other words. >> how many times can one get

burned -- ♪ livin' la vida loca what's that song? >> thanks to tony for coming in. >> "squawk on the street's" coming up next. welcome to "squawk on the street," i'm diana olick live at the white house with full details of the government's new mortgage modification plan. that's right, bold, new moves to address underwater borrowers, to address unemployed borrowers and to try and get that second lien problem out of the modification mix. let's go to all the details. the home affordable modification program, the $75 billion housing bailout, will be extended and lenders will have to start considering principal write-down. this would be an earned principal which-down by the borrower and servicer over three years. there would be incentives given to the servicers to write down the principal values of the mortgages, to get those borrowers out from under water and get them home equity back

into their homes. the next step would be a plan for unemployed borrowers. this would be a three-month forbearance plan, which would bring the debt-to-income ratio down to 31%. that is of the unemployed borrowers' unemployment benefits. so, that would be for three months with the option for the lenders to put this up to six months. there would be government incentives for that as well. then, the fha plan. this is a big one. this is a lot like the hope for homeowners plan that was announced actually under the bush administration but had very, very poor results, something like only 46 borrowers got this. this is a refi program for borrowers who are current on their loans, but it would include voluntary principal write-down by the lenders on the first lien and then again write-down on the second lien to get that total loan-to-value ratio to 115%. it would be government-assisted, using up to $14 billion of t.a.r.p. money for that program. now, there would also be increased incentives for short

sales, that is, incentives for the servicers to do the short sales. that's when you sell the home for less than the value of the mortgage, and improved incentives for borrowers to move along with increased monetary incentives -- actually, double the rate -- to lower the second liens. again, the second liens have been the problem in the modification process. also, there would be no foreclosures allowed by servicers while borrowers are in the process of this modification. so, again, bold, new moves, because as we've seen, so far, the government's modification program has not been reaching enough borrowers. they're hoping this will reach even more and get rid of some of at least that underwater problem. back to you, mark. >> diana, why would lenders agree to this? >> reporter: well, because they're getting cash incentives and because foreclosure rates are rising. the lenders are being pressured on all sides to stop foreclosures, and while they're in this program, so far, it's not been working that much. getting these borrowers down to the original numbers that they were supposed to under the old program, they are redefaulting

at high rates. >> right. >> and so, they're losing money on this. by writing down principal and having the government play a part in that principal write-down, at least they're hoping to keep more borrowers in their home, keep paying the mortgage rates. it will be a tough sell. it's voluntary for a lot of lenders on a lot of this, but that's what we've been talking about and what bank of america announced earlier this week it would start doing on some of its loans, but it's going to hurt. no question, it's going to cost the banks. >> but the banks have clearly made the judgment they're better off foreclosing than modifying. >> reporter: well, not in all cases. a lot of investors that the banks had sold these loans to are now saying let's get thooiz these borrowers into loans that will work. they're beginning to turn the tide on that, too. we'll see, because these are lenders that signed up for the program. again, they have to consider principal write-down first. that's the change. >> okay. >> reporter: it doesn't necessarily mean they have to. >> so, you have to have taken out a mortgage that you couldn't afford in order to get this break, right? they're not going to take any principal off my mortgage.

>> reporter: no. if you're current for the hamp program, at least, they're not going to do that. >> that makes sense. >> reporter: the refi program is for borrowers that are current on their mortgages, so there are vary, different parts to this. >> okay, all right. >> so what you need to do is stop paying your mortgage and then they'll come in and help you, right? >> i think they put in something. i remember this issue came up. a lot of people said, wait a minute, i'm just going to stop paying my mortgage, and they came up with some sort of way to prevent that. but i mean, i love the fact that the people who behave responsibly pay for the people who don't. i don't know. anyway, what else do we have? >> well, i'm glad you asked. beyond housing, "front & center" today, the final revision to q-4 gdp comes in slightly lower than originally thought, 5.6% rather that be the 5.9% we had before. >> all right. the new reading still makes the strongest showing in six years. >> and senator shelby, the

ranking republican on the senate banking committee, believes the two sides there can reach a deal on financial regulation. he was on "squawk box," in case you missed it, 15 minutes ago. >> that nothing is too big to fail, that there's nothing where if a company, a bank, if they belly up, they're going to be resolved, they're going to be gone. and the creditors are going to be gone and the parties are going to be gone. we do not ever want to go back to where we were 18 months ago. >> all right, let's check the futures right now. they are up 3.20. fair value minus 1.5. so, 4.70, roughly, above fair value, good for 35, 40 points on the dow at the open. the european markets are down across the board. almost 0.25%, generally. guy johnson, what's going on? >> mark, you were just getting

upset about the idea that those people who behave responsibly ultimately end up paying for those who have not been paying responsibly and that is writ large across europe today. this greek solution really goes to the heart of that very, very issue. european markets are down. greece is up today. the banks are flying because of the solution we have coming out of brussels. european leaders are leading brussels as we speak. with the kind of hodgepodge deal, it's sort of bilateral loans that greece has a problem, plus a bit of the imf. germany is being seen as the big winner coming out of this. i have to say, that is the real theme that is emerging here. angela merkel has played hardball. she's got what she wanted, but the legacy of this decision is really going to be quite immense. let me roll you on and show you what's happening with the euro at the moment and take you through the bond market reaction as well. 1.3364, meated reaction. i don't think they're convinced by what's coming out of brussels. this is not a long-term solution

and we've got four leading academics writing in today and these guys have a lot of influence, saying if germany pays out a euro-cent towards greece, they will take germany to the constitutional court, and effectively, that could lead to germany leaving the eurozone. that's kind of what they're implying. what they're saying is greece needs to leave the eurozone. so, this is a solution, but it's a very short-term solution. and to be honest, it may not be enough. greece is still paying. if you were to take the current rate of the bond market, 6.22%. now, that the not enough. the debt management office in ireland says they need to pay less than that to get this economy back on track. you are seeing some spread narrowing versus germany. look at portugal. there's a lot of spread widening there. the market is now starting to pay attention to who is next, but i suspect we're going to come back and focus on greece. there's a lot of ground that still needs to be covered, and greece has got some very short-term role problems that it

still needs to deal with. what do you think, simon? >> what i'm worried about is there has to be very serious difficulties for these bilateral loans to come through, quote/unquote. >> yeah. >> so, are they saying that you have to have a market crisis for them to come in, or are they assuming that the spreads were just narrowed because they're kind of vaguely there with the smoke and mirrors? >> the latter i think is probably the thinking at the moment. i think they are hoping, and they've done -- and you've noted it as well -- there's a lot of smoke and mirrors. they're trying to talk this crisis out and they're trying to convince the markets. the markets have not been convinced. so, ultimately, i wonder whether or not we're going to head towards that crisis. yeah? >> except now you have an enforcer, don't you? you didn't have a structure at all in the eurozone to correct it. now you've got the imf that can come in and play hardball. >> kind of, but i'm still not sure whether or not that everybody is on board with that. look at trichet. this is having significant implications, i think, for the credibility of the ecb.

trichet has made it very clear that he's not happy with the concept of the imf coming in. he's had to swallow those words. i'm still not sure that push comes to shove, that the imf is going to be invited in. i know merkel made it a condition, but she doesn't see it as a long-term story. >> the other thing that's quite interesting here, mark, and there's an article in today's "financial times" from philip stevens, is this indicates how germany now has changed and there's no great plan from germany anymore in advance of this election. merkel is now at the helm of a country that no longer feels guilty for the second world war and feels it has to bank roll everybody else. >> that's been animating some of their behavior, the guilt? >> germany has moved on. is this not true, guy? this is a very different journey now that he's not going to, as i say, bank roll the european union with grandiose ideas. merkel needs to lose another election, otherwise, she'll lose the senate in germany. >> exactly, the elections are coming up. she has to have a good showing in those, but i think you're right, simon, it is broader than

that. this is about germany changing tact. we are not going to continue to fund the eurozone experiment, the european experiment in the way that we once did. and that has huge implications for both economic policy, for political policy, for the war in afghanistan. this goes all the way down the road. >> and security. >> it's changing. >> security, they'll sit under the american blanket. that's the intention. they're not going to have to fight their own wars anymore. they'll rely on america to do it. >> it changes the game completely. >> do you think we're going to go in and bail out -- >> it's a different country on behalf of the eurozone. >> she didn't really -- >> do you think we're going to go in there and bail out the socialists? >> you're bailing out everybody else. we are bailing out everybody else. >> gentlemen, thank you. >> thanks, guy. have a good weekend. >> you know what i love about the british accent? you sound very smart even if you aren't. >> yeah, but i'm really very stupid. >> no, you're not. >> no, i am. i am. >> anyone with a british accent, to an american, sounds kind of,

you know, oh, he must know what he's talking about. >> that's not true. final read on fourth quarter gdp coming in at 5.6%. that was a drop from the initial reading. julia coronado, senior u.s. economist at bnp paribas and conrad dequadros, senior economist at rdq economics. ladies first. julia, does this number tell you anything you didn't already know? >> there's not a lot of news here. i mean, one of the biggest downward revisionwise in commercial real estate, which is not terribly surprising. most of the components were revised down, and overall, i think the takeaway is that final demand grew just 1.7% in q-4. that's up just slightly from 1.5% in q-3 and still well below the economy's potential of 2% to 2.25%. so, i think we're still seeing a muddling recovery. >> conrad, same question to you. >> yeah, as julia said, not a

lot of new information in this, but you know, i think if we look at the only forward-looking information, the inventory component, there was less of an addition from inventories in the fourth quarter than we first thought, although still more than two-thirds of the growth came from inventories. but the fact that inventory liquidation was a little bit larger in the fourth quarter is unbalanced a positive for the first quarter. and i would say that the first quarter in terms of final demand is looking a lot stronger. >> conrad, how worried are you about what's going on in the bond markets after two pretty bad auctions in the idea that the ten-year yield could go to 4%? how does that affect your economic analysis of america? >> in terms of the economic forecast, it doesn't change much for me. i do think we're going to see significantly higher yields this year, and a lot of it in in my opinion, has to do with the financing requirements of the u.s. government. i think what might be going on here now, we had a bid in the treasury market because of the problems in germany. there's a view now that maybe some of those problems are getting close to resolution, so that bid is going away. and i think that's refocusing on

the fiscal problems in the u.s., and i think we're looking at significantly higher yields at the end of this year, but i think we're still looking at 3% to 3.5% growth in 2010. >> all right, next -- thank you, gentlemen. next, we hit the u.s. markets -- >> and the lady. one of them was a lady. >> really? >> yeah. >> oh. >> probably hurt her feelings. >> that's right. it all starts to blur, even two minutes later. also, something about apple, which went by so quick. >> well, apple was at an all-time high yesterday. >> oh, is that what it was? you distracted me. >> sorry. and the push is on to create more jobs in american manufacturing. we will hear what that particular sector is saying and, indeed, there's the street poll. would you like to take this, mark? >> well, should the government focus on high-tech and green jobs over traditional manufacturing jobs? your possible answers are, america will always need traditional manufacturing jobs or it is time to focus more on green and high-tech.

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european banks are trading on the up side this morning, as it looks like we have some kind of deal for greece, but the traders are passing around comments saying expect the germans to fight very heavily on the no-bailout story developing

in germany. let's talk a little bit about what's going on here. we've got treasury rates moving up, we've got a lot of people passing around papers indicating that mortgage rates are going up, 11 basis point increase in 30-year mortgage rates in two days. that's the talk of the floor right now. restaurants are trading a little funny in the last couple days. we have brinker talking about better reports, better numbers overall, but it's been kind of choppy. cke and sonic have been disappointing, garden has been good all this week. finally just want to note, oppenheimer cut estimates on banks like goldman sachs, morgan stanley as well as bank of america. talk more about that at 9:30. tradertalk.cnbc.com. how are we looking at the nasdaq, ryan? >> hey, bob. let's start with oracle. it beat by a penny, pretty good on the top line as welcome, but it's pulling back a little bit. maybe it wasn't as big a bead as some people expected, but it was hovering near nine-year highs. research in motion doesn't report until next week, but a lot of analysts are chiming in here. credit suisse says it can maintain its 20% to 21% market share, even in this competitive

environment. bernstein says it will meet at the high end of its guidance and jpmorgan upgraded it today. so favorable stuff surrounding research in motion. apple, of course, had the credit suisse price target raised to $300, touched an all-time high yesterday. also, there are reports that samsung will make the screens for the ipads and that lenovo may become a competitor for the iphone in china, but that's basically the story there. and google, there are reports that it's sharing ad revenue as a way to get android phones out there as a major, major factor. of course, the countdown to the opening bell is coming up next. we have the buzz beyond with mark and simon when we come right back. compare a well equipped lexus es, to a well-equipped buick lacrosse. get inside each. and see what you find.

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here we are, almost starting on friday. boy, do i love fridays. and this is a friday. we have actually -- this is not good news. the futures have actually been drifting lower through the morning. we were up 3.5 points, now we're up about 1.5 points on the s&ps. still looking for a higher open, but now it's only going to be maybe 10 or 15 points on the dow. >> let's get the buzz beyond the big board. in midtown manhattan, art hogan, global equity product director at equities joins us. why are we not looking so perky at the opening today? >> well, you know, it's interesting. i suppose you could say there's a little disappointment in the gdp number, but i think that's rearview mirror stuff. i also think the majority of the stuff we're seeing in the futures this morning is more related to what's going on in greece. weakness in the dollar, strength of commodities. that's flat-lined a little bit in the opening, but i wouldn't give up the ghost here. i think the trend in this market is higher. i think we're starting to focus on corporate earnings and the ability to see an s&p 500 earn

more than $80 in 2010, and we haven't heard a single company preannounce negatively yet. and this was the week we should have heard some of that. so, i think these are probably better than the reflected valuations right now and i think the trend's going to be higher. >> art, yesterday, it's been a fantastic month, march. at one point yesterday, we were up almost 7% for the month on the s&p. we were about 20 points away from 1,200 on the s&p, which at the beginning of the month was the median target for the entire year. do you think that we're taking gains away from the rest of the year or is something changed during the course of march? >> well, i think a couple of things have changed. first of all, i think if you look at march, it's really a model for what we've seen for the entire year. this is a market that does better when it focuses on the ability for corporate america to do well. in a market that does poorly, when we focus on sovereign debt or china demand, so, if we focus on the fact that corporate america is putting in good earnings -- we heard from a

couple companies this week that are actually doing very well -- i think we'll see a market that finds a path of least resistance to the up side. i think we have a conservative estimate for earnings for 2010. those probably inch up higher after first quarter earnings reporting season. put a fair market multiple on that and you've got another 10% up side to the gains we've seen on a year-to-date basis. >> sounds like you think earnings will be a driver. the reason i ask is, the last two quarterly reporting seasons, we were overwhelmed with stuff from washington or overseas, and the earnings just kind of came and went without much comment. >> they really did. you know, when you think about it, mark, we had two of the best earnings reporting seasons we've had since thomson started keeping records in the amount of beats, both on the top and bottom line. i think the first quarter will be that again for the simple reason that we haven't heard too many disappointing preannouncements. we've heard some sneaky good things out of the consumer, especially on the discretionary end. abercromb abercrombie's doing good and some other discretionary names,

and i think as you look at what we should be thinking about, health care's going to come and go, the market's digested that. we'll have financial services reform, the market's digesting that. we're getting sovereign debt sort of to be a rearview mirror thing now and move that to the back burner. i think as we shift our focus on what the s&p 500 can earn in 2010, multiples are going to expand and we're going to see the market trade higher. >> all right, thank you, art. we'll watch with interest. >> thank you. final countdown to the opening bell coming right up. and oracle earnings beating estimates last night, and apple rising to a new record high yesterday. is it time to buy big tech? plus, a new read on consumer sentiment, all ahead on "squawk on the street" after the break.

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12 seconds. according to that fancy schmancy little clock down there -- >> in six, five, four, three, two -- >> in the headlines this hour, which i never noticed for four years until simon pointed it out to me. fourth-quarter gdp lowered from 5.9% to 5.6%. still the highest quarterly reading in six years. the obama administration announces a plan to help homeowners in trouble on their mortgages. senator shelby tells "squawk box" there's agreement on 80% of the financial services regulation bill. he's optimistic we're not far from a final deal. okay, a minute and a half until the opening bell. let's bring in jack bouroudjian, ceo of futures a indexgroup.com and cnbc analyst. what are you watching for today? >> there's been a large allocation going on, this has been happening for weeks now. if you looked in a textbook, you would see where they're selling

bonds, driving yields higher and putting that money into equities. let's see if that's related to the end of the quarter, if this is something definitely related to say the troubles in europe, because it is coming out of the european time zone. this seems to be stopping right when the european voluntaryises are dropping -- >> are you saying that the harm in the bond market is just due to people swapping into stocks, because people think it's more dramatic than that or more worrying? >> a lot of this is driven about the the uncertainty in europe, which is probably now behind us ever since germany came out as the winner and sarkozy the loser. more importantly, the end of the quarter will be the tale. that will tell us whether more of this is working into the april time frame. >> thank you, jack. jack bouroudjian there as we count you down. >> here we go with the opening bells at the big board. starwood property trust, ticker stwd, and at the nasdaq,

dryships, ticker drys, celebrating five years as a public company. can you imagine how hard it is to keep your ships dry? >> well, i'm amazed they've got much business, but there you go. our market reporters are standing by at the nyse, the nasdaq, the nymex and the cme. let's pick up with bob pisani down on the floor. >> we've got a common stock offering here at cnx, so more on that later. this morning the word is got comments on the banks coming out. bernstein just cut goldman sa s sachs' and morgan stanley's full-year 2010 and 2011 earnings estimates. at the same time, oppenheimer came out earlier cutting first-quarter estimates at most of the big banks -- jpmorgan, bank of america as well as goldman sachs, talking about loan volume shrinking a little bit and also about lower equity activity as well. important thing here is that's not really affecting most of the banks, because all of them are up on word that we look like we have some kind of outline on the

greek deal, but traders are passing around all sorts of comments about the local elections in germany. merkel's got a local election, part of germany, six weeks, and a lot of people are saying she'll be campaigning on a no bailout platform. sound familiar? important thing today, 11 basis point increase in fixed rate mortgages in two days. that's the effect of the treasury moves in the last two days. that's having an effect and traders are talking about it. on the restaurant front, brinker had pretty good comments. they own chili's, but we had mixed comments through the week. ckr and sonic making disappointing comments, but darden had excellent comments, so a little choppiness here today. tradertalk.cnbc.com as we await the secondary from cnx. tradertalk.cnbc.com. brian, how's the nasdaq? >> pretty good, bob. thank you very much. i will chime in on the restaurants here if i get a second to, but i want to start with big guys. ebay opened fractionally higher, just turned negative. amazon.com, which had a nice run-up yesterday, up 0.2%.

oracle had good numbers on top and bottom line, but basically, maybe it wasn't as big of a beat as much as people thought, but also had a huge run-up before the earnings announcement and it was at some nine-year highs, pulling back a little, 0.7%. everybody's talking about the credit suisse price target on apple at $300, but there's also a lot of news about the competition in this space. lenovo might compete with the iphone in china, up 0.9%. how about this? some positive analyst sentiment about palm, up 1.7%. bmo capital saying it's market perform now from underperform. genzyme, analysts coming back and saying, you know what, that sell-off in genzyme maybe is a little overdone. a couple different shops coming out and saying that. it's up 2.5%. and we do have an ipo here at 11:00 a.m. eastern time, china lodging group will start trading. it's a discount hotel chain in china. it priced at the high end of its range at $1 2.25. let's go to sharon epperson at the nymex. >> traders focused squarely on the euro, that's up after the imf/eu aid to greece, but still

concerns remain, and that is why we're looking at oil prices only up about 12 cents or so and gold only up about a dollar. there are a lot of concerns here, and that's impacting the commodities market. keep in mind, we're also, according to mf global, looking at potential downside risk due to bearish technical levels for gold, but dennis garvin makes an interesting point today, talking about the fact that if central banks are fearful of the dollar and are looking for a replacement for the euro, they're going to turn to gold, so we see support for gold longer term. meanwhile, when you look at oil prices, they've been hovering around this $80.50 to $81 a barrel number for the last several days and we are looking at that range-bound trade continuing, but we're also looking at fundamental news coming out from oil movements about opec supply. it's up about 400,000 barrels per day. they're predicting over the next four weeks to april 10th. so, that's something on the fundamental level. but of course, rick, as always, commodities traders focused on the dollar and the euro. over to you in chicago. >> and the dollar's having a spectacular week. no matter that, it's the tallest

midget in the room in terms of winning the award for moving higher amidst other currencies that have bigger problems. it is what it is, a stellar week. it's up dramatically. also up rather dramatically are yields, but all yields aren't created equally. we're at 99 on a two-year last friday. we're up ten basis points. we're at 3.69 on the ten-year. we're up 20 basis points. and everybody is focused on the higher interest rates and what costs may be associated with all of the programs and the debt in an environment of higher interest rates, but we still haven't closed above 3.90%, much less 4%, but those are the levels to pay attention to. it could come quickly, but the next big supply isn't a week from next tuesday, wednesday and thursday in the form of 2s, 10s and 30s. mark haines, back to you. >> thank you, rick santelli. okay, let's check the markets for you. stronger start than the futures indicated, actually. we're up about 0.25% on the dow,

0.33% on the s&p and almost 0.5% on the nasdaq. your "cnbc edge" now with michelle picard. she is highmark geneva growth fund manager, and roy williams. i know he had a disappointing season with the cowboys, but he's doing very well running prestige wealth management. he's their ceo. roy, might as well start with you. you are modestly bullish? >> modestly bullish. you know, i do have some concerns, there's a lot that happened recently with the passage of the health care bim. the impact it's going to have with the psyche of spending of corporations, small and large, you know, right now. but earnings are going to be good this next quarter and the markets are going to move ahead, but we are going to have some volatility as we move forward the next quarter. >> michelle, you were also moderately bullish. >> moderately bullish, that's true, exactly. i think we at geneva, we do some work on looking out at the

economy, and our feelings have been that we're looking at $80 to $85 on the s&p, and we feel confident that the market could have a 15 multiple on that, so maybe 1,250, maybe 1,200-ish, we feel bullish there. we feel part of the economic cycle. we're clearly in the recovery mode. real gdp up 5.9% in the fourth quarter, so yeah, we're feeling -- >> are you worried about buond market rates? >> the bond market rates, the ten-year auction that -- >> we had two auctions that were poor and now we're heading up towards 4%, aren't we, on the ten-year, which is -- >> right. well, i think in some ways that's a little bit bullish. that tells you that there is economic expansion coming. you need some movement in the ten-year, but certainly, that factors into our valuation model when we're running, you know, our discounted models, and that does put a little bit of a cap on pes, but i don't think we're anywhere near in perms of pe expansion, you know. we've got a couple points left there. >> do you worry about it?

>> i am concerned about it, but if you look at the bond market, we've been in a range for the past nine months where we've been, you know, floating between 3.5% and 4%, you know. at some point, we're going to have to deal with a deficit and it is going to be concerning and rates are going to move up, but i'm also in the same camp, you know, by rates moving up, the economy's getting better. what we're also seeing happening in the job market, my son's girlfriend just got two job offers after being six months unemployed. we're seeing clients getting job offers, you know, in various capacities -- managers, executives, middle managers. so we're seeing the job market starting to move ahead, consultants starting to get jobs. so, it's not robust, but it's way better than it was, and we're continuing to move in the economic cycle. >> michelle, why do you like monroe muffler? >> well, i think they're a nice niche company. they're actually the largest owner-operator of service stations, and they've got about 777 stores in 19 states right now. go there for oil service, you go there for, you know, brake inspection. but it's a great management

team. the ceo that i actually just met with this week at a conference, talked a lot about how building trust is the key to growing the business over the long term, and i think you see that in their same-store sales. they actually brought guidance up earlier this week. they're looking for 7.5% same-store sales for the quarter, and brought eps guidance up, and i think there are some really nice trends that are moving in their favor. not only have they built trust with the consumer -- and i think that's a company-specific driver for them -- but you've also got dealership closings and you've got the average age of automobiles has actually been moving up considerably over the last couple of years, so. >> and roy, you're avoiding u.s. government bonds. also, here's an interesting little note i noticed. for people in the tax-free, which a lot, of course, people are in. you recommend staying away from the short. >> yeah, so a short yield curve, they've gotten real pricey in terms of what you're paying and

what you're getting in terms of yield. i'd say in the four to six-year range, in the immediate-term range for shorting, but the long-term is not worth hanging the price there. >> all right. >> thank you very much. >> thank you very much, michelle and roy. coming up, some large-cap tech stocks reaching new high this week. we'll go inside the rally. you don't want to miss it. should the government focus more on high-tech manufacturing jobs than traditional manufacturing jobs? that is the question in our street poll today. squawkonthestreet.cnbc.com. once again, that is a web survey, a web poll, not an e-mail poll. hey can i play with the toys ?

sure, but let me get a little information first. for broccoli, say one. for toys, say two. toys ! the system can't process your response at this time. what ? please call back between 8 and 5 central standard time. he's in control. goodbye. even kids know it's wrong to give someone the run around. at ally bank you never have to deal with an endless automated system. you can talk to a real person 24/7. it's just the right thing to do.

12 minutes into trade. time for "commodities corner" with a quick check on natural gas. the bears are certainly winning out this week with natural gas falling over 4.5%, dropping below that key level of $4 yesterday. the price slide has been consistent, as you may be aware, all year, while crude oil has been relatively flat year-to-date. nat gas is trading lower by more than 27%. let's get some stocks on the move this morning. over to matt nesto at headquarters. matt? >> all right, simon, check it out. radio shack has been playing -- good morning, everybody. didn't mean to jump the gun. i'm just excited. the number one stock in the s&p up. they're already shopping a leverage buyout to private equity. they say they have an eager selling here. they are willing to say and also say there is a possibility of a

merger with best buy, which brings me to bachelor number two today. best buy upgraded and downgraded simultaneously this morning. it looks like the upgrade at wedbush is leading with that stock higher by about 1%. fbr cuts it to underperform at the same time here today. coach alongside of urban outfitters, both upgraded at jpmorgan this morning. coach headed to $44, they say, which is about 15% upside from where we are right now. that's good for 3% of the marketplace. nokia upgraded to overweight at jpmorgan as well, headed to $19, 3% higher in the marketplace. and lastly and quickly, they're nutritious, they're delicious, they're also higher. chiquita brands initiated a buy at cantor fitzgerald, $20 price target. hope you had your dose of p potassium this morning. >> thank you very much, el nesto grande. time for the word on the street. on the floor, alan valdes joins me. alan -- >> good morning, mark. >> good morning.

150 away from 11,000. seems like no matter what -- >> we're going there. >> -- this is the tortoise market that just keeps moving forward. >> that stealth rally. even yesterday with its reversal, we still closed above the previous day. i mean, we're just going to keep on going. >> there's no question this will persist? >> no question. the trend is your friend, we say down here. we're up the last 6 of 20 days. it's zero interest rates, this is the only game in town and they're coming here. >> why not more enthusiasm? in the rally. i mean, don't get me wrong, i'm not complaining the market's gone up, but i mean, with zero interest rates, why aren't we really pooling? >> you'd think it would be through the roof, you do. but i mean, we are up. we keep trending up. but i just think a lot of people, especially the average guy is still nervous. there is still a disconnect between main street and wall street. main street still has high foreclosures, high unemployment. we showed the housing market yesterday still a little weak out there. so, i think that's where the

real disconnect is. that's why you don't see it this year like you've seen in past years. >> but that's not enough to discourage the market? >> no. the market keeps trending up, unlike volume, but yes, it keeps trending up. >> all right. alan says we're going to keep going up. thank you, alan. >> thanks, mark. >> have a great weekend. >> you, too. >> alan valid yedes. coming up, breaking economic data on march consumer sentiment. >> and getting in on the large-cap tech rally. is it too late to buy the big names like apple and oracle? find out next. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ]

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in honor of the baseball season about to start here in the states, a bunch of stocks hitting new 52-week highs. we're calling them the high hitters, mark. on the list, urban outfitters, coach, progressive, lennar, starwood hotels. and we were going to have comcast on that list, but sadly, our new parent company hasn't made it.

apparently, they've just fallen just before we were about to come to them. >> but -- >> not a terribly good omen. >> but i'll tell you what strikes you is how handsome the management is. >> comcast? >> yes. very handsome. >> if you divided loyalty -- >> very handsome, distinguished looking -- >> because for years you've been saying how handsome ge executives are. divided loyalty there. >> they're starting to get a little old. >> oh, really? >> starting to get a little old, but those guys at comcast. anyway. >> i'm sure they're over the moon with that. >> "street cap" time. toyota plans on stopping production at factories in the uk and france for nine days due to falling sales. china, they're going to launch stock futures trading april 16th. they will trade on the shanghai and shenzhen stock exchanges. spyker expects to sell 50,000 to 60,000 saab vehicles in 2010. the company also reporting a

$30.5 million loss for 2009. ceo victor muller expects the company to make a profit in 2012. >> okay, after the bell last night, oracle reported earnings that just beat analyst expectations. and of course, apple shares, as you're probably aware, hit a new record high. so, what is driving tech at this stage and has it got more room to move? joining us is rob sanderson, director of research at abr investment strategy, and roger kay, president and founder of endpoint technologies. rob, before we go any further, you've been through asia recently, i understand, visiting those in the supply chain. just talk to us generally about what you're finding on the ground. >> yeah, a lot of strength in demand right now. components suppliers are seeing month-on-month increases in orders. there's been an acceleration in the order books post chinese new year, which was late february. and there's just a lot of visibility downstream going on right now, and it's, you know, very encouraging to see at this time of the year, very

nontypical seasonality. and the only explanation we can see is really just benefiting from a global uptick in economic conditions. >> so, how does that feed into specifically what we have on the plate today, which is oracle's earnings last night, and of course, apple riding high? >> yeah, well, oracle, you know, this is a later cycle stuff with big enterprise spending and we really haven't seen corporate demand come back to a large degree yet. accenture said similar things last night, seeing positive signs. i think this is a really bullish indicator, because the strength that we're seeing around the world is really, you know, not corporate-driven, and i think when spending recovery does come later in the year, it's just going to add another leg to the growth that we're seeing out there. >> roger, why is apple so strong? >> well, apple's so strong because it's a great company. i mean, it just keeps doing well. of course, we're on the eve of the introduction of the ipad. there's been a lot of interest in the run-up to that. >> do you think the ipad's going to be a hit, huh?

>> well, i think that they could easily double the size of the tablet market, which isn't very big, but they could easily do that and maybe triple it this year. so, already that would be pretty good. so, i think adoption of the ipad will probably be better than most people have been expecting. i think apple's going to actually change the way people view tablets, and certainly, the faithful will buy right away and then there will be others that come along soon after. >> and rob, you also like apple quite a bit, don't you? >> yeah. apple's just a great franchise on a lot of core products. you've got tremendous earnings momentum. they're in the right place with the right products at the right time, and valuation's still pretty compelling for a large-cap growth stock. >> yet, you are favoring components suppliers over the original equipment manufacturers. >> yeah, definitely. i think the tightness we're seeing in the supply chain along with the strong unit growth really means you're going to

have an extended period of peak margins. if you're looking for large-cap plays there, you've got to go to intel. i think there's going to be a very strong quarter coming up here and they've got good visibility for the next few, and if we do see that corporate spending recovery, again, you get another leg of growth in the back half of the year. >> roger, let me take you back to oracle. what is your view in the wake of the earnings that we had last night? you know, there's a lot of execution issues there, not least with betting down sun and a not insignificant competitor, it's had its recent problems, s&p over in germany. >> right. well, i think that the most important sign of oracle is that really corporate spending is beginning to come back. and i think that we're seeing this really in a very broad basis. i mean, not only oracle, but also qualcomm on the silicon end and best buy on retailer saying that their visibility is just looking brighter all the time. so, that's both consumer and corporate, but i think what we haven't really lit up yet is the corporate side of the board. so, consumers have continued to buy, but corporations are just

coming in. so, i think in the back half of the year, you're going to see more corporate buying and right into 2011. >> okay. great. thanks. good to talk to you both, rob and roger. we've got consumer sentiment that should be coming out at any point now. let's get over to rick santelli, who's watching the boards. rick. >> well, simon, i wish i could give it to you, but i don't quite see it yet, but we are looking for a slight improvement. this is the march final, of course. what is it? 73.6. it just popped up. so, indeed, we had a better-than-expected number. it moves a little bit higher than our last look, but indeed, it is not at its optimum level. many say, of course, it used to only track with the equities, but these days i think maybe it's tracking on the jobs front as well. and of course, today is an important day. many people looking at some of the recent announcements regarding mortgage modifications. >> oh, yeah, that's great, isn't it? >> come on, what do you think? >> you know, if you're a bank, you get bailed out for

overleveraging. if you're a country like greece, you get bailed out. if you're a homeowner with a second mortgage and fluctuating rate, you get bailed out. if you did the right thing getting a 30-year mortgage, you're sunk. you're sunk. >> i know in your own situation, you have a 30-year mortgage -- >> absolutely. >> and they won't let you refi. >> no, i can't refi! i can pay more on my mortgage, but i can't pay less. if a guy did something wrong and he's overlevered, he's getting bailed out. >> no matter what you think of mortgages, wolfman and i have done this ordeal. we did it a year ago february. these programs don't seem to be working. but one thing you can't take back no matter what, and that's how much they cost and how many years forward you're going to pay for them. that's what everybody watching's going to have to deal with. back to you, mark. >> all right, thank you, rick santelli. >> wolfman. >> people seem to come up to rick and button-hole him about stuff. coming up, brand new state-by-state data on job creation in america. where are the jobs? find out next.

and the dow and s&p are on track for the best first quarter in ten years! you heard me. a money manager trifecta on positioning now, the second quarter, whatever that means. >> trifecta.

yeah, we're still live and we're still cooking on a friday morning from the financial capital of the world. welcome to the second hour of "squawk on the street." good morning, everybody, once again. i'm mark haines. stocks on track for their fourth straight week of gains. bank of america and alcoa, two of the biggest gainers on the dow. consumer sentiment came in at 73.6%, little better than expected. delta, coach, lennar all hitting fresh 52-week highs this morning. now, down on the floor, simon and bob pisani with the mark "rundown." simon? >> we are half an hour into trade. what's kicking, bob? >> the important things is financials is having a great day and a great week, despite bernstein cutting estimates for the full year, depending what

you're talking about, but goldman, morgan all to the up side, european banks to the up side. what's amazing to me is the traders on the floor who wouldn't normally talk about european politics are saying, you know, merkel's going to have a problem here because she's got local elections in six weeks and -- >> pronouncing west fiala -- >> get that right, if you can find it on the map. traders cannot, but now they're experts on german politics and she's going to campaign on the no-bailout thing. this will be very important, like the bank bailout thing in new york, bob. i love hearing this. >> is greece moving stocks? >> oh, it's moving it indirectly through the euro-dollar situation. that's what's going on. i'm not poo-pooing it, it's just interesting to see stock traders in the united states try to scramble on the elections. merkel's in trouble, by the way, berlusconi has elections, too, and he doesn't have his hands clean. everybody's all of a sudden an expert on european elections. and consol priced this enormous

offering today. consol is trying to complete the acquisition of part of the dominion resources. they're buying a huge amount of business, debt expiration business, dominion, they priced successfully a secondary and a debt offering as well, another sign that it's getting easier for companies to raise money. >> okay. thank you very much for that. let's get over to the nasdaq and the freshly bespeckled brian shactman. brian. >> simon, there's been so much talk about apple, as there should be. credit suisse raises the price target to $300, you have a situation where the ipad is launching very soon. but i want to talk about research in motion, because they report next week, but analysts today chiming in on it, and most of it positive. the stock's up 2.2%. credit suisse has a price target of $75. they say they can retain market share in this competitive environment. bernstein says they'll meet the high end of guidance with earnings. and jpmorgan downgraded, although their target is lower than credit suisse.

and bob was talking about restaurants. well, they upgraded cheesecake factory and pl chains. all the restaurants are up here at the nasdaq. back to you, simon. >> thank you, brian. let's check out on the energy market, we go over to sharon epperson at the new york mercantile exchange. sharon, good morning. >> good morning, simon. we're looking at a very technical trade here for oil in the last half hour or so. we did see oil prices drop below $80 a barrel, $79.59, actually, the low of the session. and it seems, actually, the $80.20, $80.30 level's a key support level for crude oil. also watch $79.36, where oil prices started 2010 on the nymex, and that is a very, very strong support level right now. we don't really seem to be able to get any substantial momentum above that $80 mark this week. we've been very range-bound all week. and really, the dollar impact has had much more of an impact overall in the commodities sector in terms of the weakness that we're seeing, particularly when you look at the grains market. when you're looking at some of the commodity etfs and the

sell-off we've seen over the past week, we're really looking at a substantial down drive in the grains market, in the ag commodity etf, largely because in addition to the dollar impact, we're also expecting to see, according to dennis gartman, a record level of crops for corn and soybeans. when that report comes out next week, we'll be watching that carefully. rick santelli, to you in chicago. >> thank you so much, sharon. there's so many areas people in the marketplace and the markets are paying attention to. of course, greece, but the notion of greece, something's going to happen, pretty much everyone believes, but the stencil of help is what bothers people. is this going to make moral hazard go more global? these are key issues. rates are up on the week and curves are steeper, but not the steepest it's ever been, but still wide levels. what's that mean in english? all rates are going up, certain rates are going up faster. the dollar's having a great week, even with the down day. and everybody's talking about the swaps being negative. yes, seven-year swaps, ten-year swaps, 30-year swaps have been

negative for a while. all three of those maturities are negative. what does it mean? it's complicated, but the long and short of it is, if everybody feels their backstop, you're going to see unusual pricing going on in many different markets. mark haines, back to you. >> rick santelli, thank you, sir. dow closing in on dow 11,000. we're 110 points away right now. the dow and s&p on track for their best first quarter in over a decade. the latest market action calling for a market triple play. on the team, jerry, mark freeman, portfolio manager with whg funds, bob, our portfolio manager of the hour growth fund. let's start with jerry. what do you think, jerry, where is this market headed? >> oh, boy, for the year, it's still got a lot of room on the up side. the next couple weeks, we probably get to a little over a trace, but when you look at about what the bears are faced

with today, they've got big earnings expansion and earnings surprise that are going to fight them every way this year, at least until the fourth quarter you just don't want to fight that. the world economy keeps surprising on the up side and now the u.s. is starting to participate, so that just means whatever you expect the companies to earn is probably going to be a little bit more, and at these interest rate and multiple levels, you shouldn't be short this thing. >> mark? mark? your thoughts on the market. >> good morning, mark. i would agree with the comments you just heard. from our standpoint, we think investors should be focusing on quality. one of the things is that we've seen a very strong rally, but i think what i would also note is that the rally has broadened here in the first quarter and the high-quality names are now participating, and that's very different than what we saw in 2009. so, from our standpoint, we think that high quality and the role that high-quality management will play in the role

going forward will only increase, so i think that's where investors should be focusing. >> bob. >> well, we're very bullish at our fund, but as this market clicks off these hash marks, so from the market bottom, where we've clicked off 7,000, 8,000, 9,000, 10,000, now we're encroaching on 11,000, i think this is very psychologically important. and the dow jones, more than other indexes, as i think back just in my short career, when i started as a broker in 1986, i can still remember where the dow was the day i walked in the door at dean witter reynolds. i can remember where the dow was when my first son was born. i can remember where the dow was when my second son was born. i can remember when the dow hit 14,000 -- >> forgive me for interrupting. where do you think it will be by the end of the year? >> well, with these low interest rates, just like jerry said, we

are surprised the dow isn't much, much higher. and so, i think by the end of the year, you could easily see the dow approaching 12,000. and that's without it even breathing hard. >> jerry, what about the rate at which we have made gains? i mentioned earlier in the program yesterday on the s&p we were up 7% almost for the month heading towards 1,200, which at the beginning of the month was the median estimate on the market for the year-end target, not where we'd be at the end of the first quarter. >> sure. >> that's a big move and it's quick. >> it is, and that probably means we've got to go back and forth here for another four, five, six weeks, but it doesn't take away the big progress over this time. the fact is, earnings have been understated for 2010, really for the last six to nine months. and as people realize the earnings power of the s&p is probably north of $82, $83. if you go back, simon, back just

four, five months ago, people were only thinking in the 70s. so, we've actually -- earnings estimates are actually rising fasterern the stock market is right now, and that's, again, the problem if you're trying to keep up with this, because the pace is still very, you know, v-like in terms of the earnings expectations and the economy. >> all right, gentlemen, thank you. jerry, mark, bob. >> thank you. >> do you remember where the dow was when you joined cnbc? >> nope. >> okay. read. >> i'm still thinking. >> i'm sorry. i didn't mean to jump at you like that. >> no, i cannot remember -- 2,000 something -- >> because bob remembers at each point in his life where the dow was, as you heard, when his son was born and -- >> i heard, yes, yes. i don't remember. >> interesting how people -- >> a lot more ahead, yes, indeedy. the latest state-by-state jobs figures released just minutes ago. find out if companies are hiring where you live.

then, the real estate of american manufacturing. the president of the national association of manufacturers will be here. plus, is the latest housing plan the big fix or is it just prolonging the final foreclosure crisis and the agony? before the break, here are your morning movers.

standard & poor's reaffirming its long-term ratings for portugal, following steps by the government, of course, to cut the country's deficit to less than 3% of gdp, they say, by 2013. s&p is keeping its outlook negative for portugal. want to bring your attention to some of the stocks on the move. back to matt nesto at hq. matt. >> all right, starting with a small cap that's flying today. it's takeout talk. rti international, the stock is gapg higher on big volume here today. briefing.com pointing to bae systems as a possible takeout candidate. this is the rumor du jour. they make titanium, based in pittsburgh, about a $900 million market cap. seagate technology, last check the worst stock in the russell 10,000, down just about 3.5% today, cut to market perform from out-perform at bmo capital. i mentioned it earlier, but i want to show you, urban outfitters is at an all-time high. that's what i didn't mention. it is upgraded as it hits an all-time high. that's a bold call in my book,

at jpmorgan. they think the stock is worth $44, up 4.6% here today. it took out the previous all-time high at $38.40, which had stood since september of '08. progressive insurance upgraded to out-perform from market perform at fbr. jpmorgan also with a tweak there. good for 4% and change. something's going on in utilities today. four out of the top ten actives in the s&p are utilities, including number one, nisource. we're also seeing progress, pinnacle and pepco all up on big volume in utilities, simon, utilities. go figure. >> all right, matt, thank you very much. the bureau of labor statistics just released its state-by-state employment breakdown. bertha coombs takes a look at which areas are creating jobs. she joins us live from michigan. bertha. >> reporter: yes, simon, the bls says 23 states saw job gains in february. michigan and a lot of the big manufacturing states were among the losers.

this is a state where 16% of the economy comes from manufacturing, and they are fighting for every job they can. but in february, despite the fact that unemployment ticked down to just over 14% that month, the state saw a net loss of 16,000 jobs. the majority of them coming in manufacturing. 5,000 new layoffs last month, more than 1,000 of them in the auto sector, which had seen gains in four of the last eight months since the big three restarted plants back in july. next door in ohio, unemployment actually inched up to nearly 11% as more jobseekers re-entered the market. the buckeye state saw a net gain of more than 3,000 jobs. more than 5,000 pink slips in manufacturing. offsetting gains they had seen there over the last three months. year over year, nearly 60,000 jobs gone in manufacturing in ohio, though they expect to see 1,000 new jobs coming on line

with gm this summer. they say the job hasn't been doing enough for new jobs. manufacturing-reliant states are putting the hard core press on mfergz to bring high-producing jobs, even from small firms like the 70-person ricarro plant here in auburn hills, michigan, outside detroit. the firm exceeds for the big three and for bus-makers, but recaro also makes high-end, highly rated child car seats. that's the part of their business they expect to grow ten fold to $50 million in sales over the next four to five years. they looked at moving production west to be closer to asian suppliers, but michigan offered them big tax incentives to keep and help them foot the bill for their expansion here in auburn hills. >> state offered us incentives to, in terms of our investment, equals a certain amount of money, which means, okay, they will help us retain so many jobs, and as we go forward and

as we obtain some new business, then they will also entertain new credits for additional jobs that we would bring on. >> reporter: they're actually building a new production line as we speak, expecting to add a few new jobs over the next month or so. over the next couple of years they expect to add 30 jobs, so they'll go from 70 to 100. michigan recently announced, actually, that it had struck similar deals with more than a dozen firms. they expect that that should bring about 7,200 new jobs and nearly $750 million in new investment in the state. and guys, they expect that those jobs will have a ripple effect and perhaps create other jobs. a lot of times, dan wilson, one of the economists from the san francisco fed, looks at these incentives. he says it's a zero sum game. so, in this case, michigan is taking jobs away from california and washington with this plant, and from some of its neighbors as well with those very aggressive incentives. back to you. >> okay, bertha, thank you very much for that.

bertha coombs there, live from michigan. and we're going to talk about specifically what the national rate of taxation should be for corporations to try and boost employment ahead on the program. the national association of manufacturers' top man will be here on his strategy to protect jobs being lost to china. and the street poll this morning. we want to know, do you think the government should focus on promoting high-tech and green jobs and de-emphasize traditional manufacturing? is the fight already lost? logon to squawkonthestreet.cnbc.com to vote. let's have a quick check on the dollar while we're about it. we'll see that after we reach some sort of murky resolution in europe today, the dollar is down.

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we're back, protecting jobs, creating jobs, especially in the manufacturing sector. a key issue for lawmakers. a financial issue for many americans. in washington, john engler, president of the national association of manufacturers, is here on manufacturing day. he is, of course, the former governor of one of the nation's top manufacturing states, michigan. governor, thanks very much for being with us. >> thank you, mark. we want every day to be manufacturing day in america. >> i'll vote for that, but the question is how and, you know, under what circumstances. you have three main points. number one, reduce corporate income tax rate to match competitors. my question is, since corporations don't really pay taxes, they merely collect them, what difference does it make? >> well, we're being asked to collect a lot of taxes and other nations don't ask the same

thing. we're seeing in a world today that's highly competitive, where nations all over the globe are targeting u.s. industry and manufacturing, they've cut rates. by standing still, we've lost ground. that's what the milliken report we've put together points out. if you want to raise gdp, create 2 million jobs, get the corporate income tax rate back down to the average in the oacd nations, taking the rate from about 35 to 42, mark. >> but don't non-u.s. manufacturers enjoy an enormous advantage in terms of the wages they have to pay, and that means far more than the tax rate, doesn't it? >> no, not necessarily. we've got a lot of products in this country where the wage is less than 10% of the product cost. energy's a big deal for a lot of them. we've got products where they're 50% or more energy. wages are important, and the skills of the work force are important, but it's just a factor. you saw caterpillar taking $100 billion charge this quarter.

john deere probably $150 billion, ak steel $31 million. that's all on health care. all of these are costs. at the same time, last december, mark, we had an r&d tax credit in the 80s, was the best in the world, by december it was 19th best and by the end of december, it expired. we have no incentive for r&d in the country, at least in comparison to anybody else in the world today. >> so, what would you say to parents that are watching you now that are worried about what jobs their children will have in the future? in what should they educate them? what will be the industries of the future that america will expand to the rest of the world? is it high-tech? is it green? >> well, i thought the question actually is a false choice, the focus question today, because is high-tech and green or traditional manufacturing, but traditional manufacturing has become very, very high-tech. it's one of the reasons that we're seeing u.s. manufacturing output, which is still number one in the world, be done with fewer and fewer people. the productivity's astounding.

and we're going to come out of this recession, unfortunately, with a lot more productivity. so, the jobs response to an economic recovery will never be as robust as we might like. on the other hand, output at some point we think will go back and be the best ever. so, i say do the technology, be highly innovative, but you've got to understand that competition is across the board today, so you've got to do everything right. look at that piece you ran on the incentives in michigan. these states are killing themselves to give incentives, but the only nation in the world who doesn't really play in that game is the united states. we say, my, you've got to be lucky to be here. be thankful. >> what about the competition between states, which is also what we heard from michigan before you came on? >> well, it is important and it matters. i'd love to see that competition more on the skills of their workers rather than how much tax incentive, because the big taxes, the heavy taxes that matter globally are the national tax structure, and that's where

we've become out of balance and inconsistent and unpredictable. and so, you've got investors saying around the world, this is a more stable, more predictable, reliable environment than the u.s. that should never be. i want the u.s. to be the best place in the world to have a company headquartered, the best place in the world to do the bulk of your r&d, and today we've got challenges on both fronts. >> i want to preface my next question by saying that i am one of those people who is old enough to think that we need to be making stuff in this country. i just feel more comfortable with an economy that makes stuff. >> yep. >> however, let me ask this question. aren't we in danger of fooling ourselves about what we can actually do? i'm going back to this issue of competitiveness of wages and things. i mean, the textile industry is never coming back. >> right.

>> the shoe industry is never coming back. a lot of industries are never coming back because other countries have low-wage workforces. shouldn't we be focusing more, if not exclusively, on high-tech jobs, things where we have a brainpower advantage? >> well, yes, but even in steel production, look at the transformation of a u.s. steel. there are different companies, demand some cases, brand new compared to the old steel industry, but there's still a robust steel industry under tremendous competitive pressures. in other areas, we still have the ability to make a lot of stuff. i think we just underestimate how good and how much of that we make because so much of the consumer products come in from overseas, but the reality is, we still have a bright future. and if you think of it from a national security standpoint, add that to economic security, we'd better not lose our manufacturing capacity, and that's why, say export control

reforms, which could add $60 billion to exports, reaching toward that goal the president wants to double -- >> what's that? that's a call for protectionism? >> pardon? >> is that a call for protectionism? >> no. in fact, it's an out-moded cold war relic. it was at one time we thought we had all the technology well protected here, not let it be sold to a potential military competitor, and that way, we'll keep the world safer. well, what's happened, our allies now make all the sales all over the world, and the u.s. products can't be sold. in fact, the defense department thinks that's the threat to national security, not, you know, harming these companies. and that's just -- if we go through washington, and so many areas, one right after another, we just have not kept up. we haven't been getting the work done. and i think that there's never been more support in the last 20 years for a manufacturing renewal, revival in this country than there is right now. the general motors near-death

experience woke up a bunch of people. now congress has to catch up. >> all right, sir. thank you very much. >> good luck. >> we appreciate you sharing your time with us. >> thank you. >> former governor of michigan, john engler. great point he made about the steel industry. >> yeah, but it's a heavy industry, isn't it? it's a bit like beer. they're one of the few things you can't transport because the economics don't work out. most other things are much easier to transport. >> well, thank for bringing me down again, simon. i mean, i was starting to feel better about all our manufacturers. >> on the basis of the u.s. steel industry. >> yeah. i mean, talk about an old-line business that has reinvented itself, still makes steel, but has become more competitive. >> why don't you -- >> i'm going to cling to my hope -- >> why don't you give the street poll a thought? should the government focus, mark, on high-tech and green jobs or more traditional ones like steel? logon to squawkonthestreet.cnbc.com or financial services.

we could all sell financial -- >> oh, yeah, that's one i can put a lot of faith in. that's an excellent example of what -- >> we could do insurance. >> -- bothers me. >> yeah, that would be great. >> i want us to make stuff, things, objects. >> stuff. >> real things. now that health care is becoming law, what is next for your money, the administration's legislative agenda and all of that? that's all coming up. plus, trades to make today as we head into the weekend, your friday trade, just minutes away. and as we head to break, here are some of this morning's new 52-week highs.

7:33 on the east coast, 10:33 on the east. stocks adding to gains after the consumer sentiment data held steady for march at 73.6%. s&p affirms its outlook for portugal. the outlook remains negative. and fourth-quarter gdp revised to 5.6% growth, down 0.3% from the reading that we had earlier, mark, but the important point is that america is still doing far better than everybody else, with the exception of brazil, at above 5%. europe barely grew in the fourth

quarter. >> well, we expect that from europe. >> even canada only grew 5% at an annualized rate in the first quarter. the united states is doing better. it is a fact. you might say it's not real. you might say it's government stimulus solely, but it's -- >> well, one doesn't -- >> it's writ large in the figures. >> well, asia's doing better, china's doing better. >> well, we know that -- >> but then again, i don't trust the numbers in china have we didn't have a sub lending crisis in china. banks didn't go to war. >> let's look at the markets and their internals. right now the dow up 56 points, not too bad, 0.5%. in fact, it's 0.5% on the nasdaq, 0.66% on the s&p. and that's in favor of the ups. on the nasdaq, again, better than 2-1 in favor of issues rising.

congress approving a package of final changes to the health care bill, and president obama all but daring the republicans to try to repeal the law. in this morning's "harwood file," john's looking at the political climate following that astounding victory by the white house. john, good morning. >> good morning, simon. and it's important to separate what did and did not happen politically speaking when health care passed. what did happen was democrats averted a catastrophe. had they not been able to pass that legislation, it would have diminished credibility in obama's administration and in the congress and made their political problems, which are principally over the economy, a whole lot worse. but it hasn't transformed the environment. now, democrats, as you mentioned, are eager to challenge the republicans on the issue of repeal. you had president obama out in iowa city yesterday saying, essentially to republicans, bring it on. >> if these congressmen in washington want to come here in iowa and tell small business owners that they plan to take away their tax credits and

essentially raise their taxes, be my guest. if they want to look lauren gallagher in the eye and tell her they plan to take away her father's health insurance, that's their right. they want to make darlene neff pay more money for her checkups, her mammograms, they can run on that platform. >> so, clearly, that's a conversation the democrats want to have. here's another one -- financial regulation reform. wall street is exceptionally unpopular. all the polls show it. nancy pelosi came out in her news conference yesterday to take credit for health care but also pivot to financial regulation reform and say we're happy to have that fight, too. >> bipartisanship is nice, but it cannot be a substitute for action, not having it cannot prevent us from going forward. so, if they don't want to regulate wall street, we do and we will. >> but here's where the conversation is not going from the democratic point of view. they do not want to take up and

try to pass immigration reform. too difficult for those members in swing districts. same for cap-and-trade on energy. those are issues that aey're li to steer clear of, except for a lit rhetoric the rest of the year. they'll try to create jobs with the loan modification program today, especially targeted toward people who are out of work and under water. >> all right, thank you very much, john harwood. before you go, tell us about the feeling in washington about the president's latest housing push. >> well, mark, everything the administration has tried on this front has had only limited success. that hamp program to help people stay in their homes, avoid foreclosure, hasn't done all that much. they're putting some more money on the table, $14 billion of t.a.r.p. money. and they're going to take the slings and arrows they get from people who say it's unfair for people who have been making their mortgage payments. this is a case where the administration looks at 11 million people under water,

rising levels of foreclosures, seeing that as a weight on the economy, trying to do something about it, in particular, the three months of assistance for people who have been out of work. they'll see if they can make a deeper impact with that than they have so far. >> here's the thing, john, and i don't think many people out there would argue with me. if you're in trouble on your mortgage because you lost your job, yes, we should find a way to help you, or because you've become very sick, you know, you have a health crisis which causes a lot of people to go bankruptcy, yes, we should find a way to help you. but if you lied on your mortgage application, you borrowed money you knew you could never repay, you paid too much for the house, i'm sorry, see you later, go down the toilet because that's where you belong. >> well, look, i think there's some merit to the argument you're making, mark, and i don't think they're intending and i don't know exactly what safeguards they're going to have to prevent help from going to people who lied as opposed to those who borrowed unwisely, but

i think it's a balance of problems in front of them and they've got so many foreclosures in, and the foreclosures are rising and weighing down the economy, i think they think they've got to do something. >> that's the free market's way of getting rid of the dead wood, john. anyway. >> it is, but they've got an election to run this year, mark. >> yeah. well -- >> you're wrong in one sense, because as long as house prices fall -- >> no, no way! >> you're destroying value, aren't you? if house prices fall, trillions of dollars of value will be destroyed. you've got to stop prices from falling. and net-net, if you can structure it so you hold it like an ice pick, you're going to save more value and more -- >> but that's the big if. >> it's a moral housing question, exactly the same as. >> no, no. my view would be -- and i know some economists will agree and some will not agree -- my view would be, the market is going to take prices where the market is going to take prices, and the only thing that the government can do is slow down the process. >> that's not true. >> but we're going to get -- >> that's not true because you're a keynesianist.

you believe the government should pump money into an economy to stop money from going down the tubes. why wouldn't you do that in housing as well? >> that's a different ball game. the entire economy, yes, the government needs to step in and spend money in order to keep the economy perking, priming the pump. but in a private market like the housing market, i'm sorry, prices are going to reach a level, and until they get there, you can do whatever you want. it's not going to help. it just draws -- you know, there are economists -- >> but how many more people will you pull into bankruptcy as their main asset falls? >> as i said before, if there's a real good reason why these people are behind, like they've got a terrible disease, they've lost their jobs, absolutely, i think we should find some way for them to qualify for some help. but the speculators, the people who bought ten condos hoping to flip them -- >> and what proportion of the housing market do you guess that is? >> i have no idea. i have no idea. certainly, in ft. lauderdale,

florida, it's a big portion. and the people who sat down and signed a mortgage application for, let's say a $500,000 mortgage and they only make $60,000, come on. they knew they couldn't pay that money back. now we've got to bail them out? no. but i agree that the lines must be drawn -- >> and i agree. and i agree. >> lines must be drawn to help people who genuinely have fallen on hard times through no fault of their own. absolutely agree with that. coming up, main street's mood now that the economy is turning around and stocks are moving higher? we'll look at it. and we're going to talk to the mayor of eli, nevada, our next stop along -- >> oh, my lord, i've been there. >> have you? >> yes. >> you've been to a lot of places over the years, including paris.

hi, folks. welcome back to "squawk on the street." matt nesto here. well, your core business has just been decimated by the health care legislation, and yet, sallie mae is raised to out-perform this morning and leading the s&p 500 with a huge 9% gain. they think it's going to $18 a share. they say the core loan origination business may be gone, but their expertise in servicing and collection exists and is undervalued. first marblehead also in that business, up 4% today. also, glg partners gapping higher on huge volume year-to-date, up 9%, number one on the russell 1,000. "bloomberg report"ing that man group, the largest hedge fund based in london is seeking to acquire glg and/or a stake in slc partners. well, nobody's commenting on this deal, but the market certainly is, simon. all those stocks are trading higher here today. back to you. >> all right, matt, thank you very much for that. the dow obviously has had a good week, a very good month,

inching closer to 11,000. let's get the friday trade. bob pavelec is with bannon partners and david stevenson is with hardesty capital management. david, what would you be holding now as we head into the weekend looking forward to the final end of the quarter? >> yeah, well, we would hold our entire portfolio, of course, but we're focusing on stocks with low-key multiples and reasonable growth rates in 2010 and 2011. those stocks appear the most attractive to us. >> give me some names. >> well, we like hewlett-packard, we like ultra petroleum, we like medtronic. those are three great names, all with very good growth rates, all stocks that we think are probably going to double within the next two or three years. >> all right, bob. >> i've got two names for you. the first is target. discount retailer. the trends in retailing had continued to be off. you're going to see positive growth in jobs next week, so

you're looking at something that's going to be taking advantage of that situation. the consumer is starting to spend. income is increasing, so i like target here. i also like qualcomm. take a look at what happened to the stock back in january when they disappointed. the company really got pummeled. we owned a little bit of stock, ended up buying even more when the stock was down $38, $35 range. the company comes out yesterday, brings earnings estimates to where analysts -- to above where analysts had back when they announced in january, and so, you have a stock that's trading at a 12.5% discount, but the prospects for going forward continue to even improve. >> all right. the president is -- hold on just a second, guys. president obama talking about the new starch treaty with russia, addressing that right now. if he starts talking about housing plan or financial regulation, we will cut in and bring it to you. now, i'm sorry, what? yes, i know that. going back to our guest now. where was i going to go. oh, david. >> yes. >> david, you see medtronic as a

winner in the health care reform? >> absolutely. let me explain why. >> explain, yeah. >> yeah. before, when they first started discussing health care reform, medtronic, or that industry, the medical device industry, was looking at $20 billion potential expense to individual countries in the form of a higher tax. that number now is more like $2 billion spread over the entire industry. medtronic alone has a $1 billion expense reduction plan already in place. so, they will be able to very easily absorb any of that, and really, we don't think it will affect their margins at all. plus, they have products coming into the pipeline that we think are very attractive, and it's all trading at 13 times. very good number. >> we've got to leave it there due to time. david, bob, thank you very much. have a great weekend. >> thank you. straight ahead, stocks are up, the consumer spending, what does that say, meow? >> i have no idea. >> consumer spending meow. >> no, that's moew -- i don't

know what that means. >> the economy showing signs of life. >> so is main street. >> meow! >> is main street feeling better? interesting, you know, interesting -- consumer confidence numbers are not rising, but spending is. so, people seem to be saying one thing and doing another. the mayor of a town in the middle of it all is up next. well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco.

we are continuing our truck along route 50 to find out what main street thinks of the hot button issues in washington and on wall street. today we are going to ely, nevada. it is in eastern nevada, population about 5,000. it is the next stop on the road to recovery. john hickman is the mayor of that city. mr. hickman, good morning, and thank you very much for talking to us. >> good morning. >> believe it or not, i've been in ely, nevada. and when i was there i was struck by the fact that it's

kind of remote, not a lot around ely. what is your economy based on? how do people make their money? >> well, ely is a mining community and it has been for over 100 years. we have our main sources of the copper mine which is only about five or six miles away. we also have the nevada state prison here which is the maximum security prissen and then we have a lot of government facilities forestry and then tour and rec. >> how is the economy in ely these days? have you suffered along with the rest of us or because of the special nature of the time have you been insulated? >> we're remote, so we are insulated but i just got the figures within a few minutes ago that our unemployment has risen to 9.3. it had been right around 7.5, 8. it is starting to hit us a

little, mostly in tour and rec. >> a lot of conversation in washington about what should be done. before we came to you we were talking about specifically the new moves. the $14 billion effort to help people in difficulty with their housing. and i just wondered how that would play locally, the idea that there should increasingly be a raising of mortgage debt and some of the principal should be forgiven by the local banks and just shed some light about people say where you were. >> las vegas is 240 miles away where they have a lot of foreclosures. ely hasn't gone through any of that. we have received stimulus money in the amount of about $1.5 million for sewer systems and road improvement. but housing, it hadn't affected

us that much in the economy. >> do you have the, do people in your town have the traditional western distrust of that government back east? >> are we a distrusted government back east? oh, yes. ely is pretty much a conservative area. white pine valley is. >> mr. mayor, thank you very much. appreciate your time. >> okay. >> hope things continue to go well in ely. no six in 60 coming up? i have to tell you, i went to ely during a trip back east from san francisco and at night because i didn't want to go across the desert in the daytime and coming in from the west there was not a light bulb for hundreds of miles until you get to ely, nevada. it is in the middle of no where. remote understates it.

beautiful little mining town. it's up on top of the mountain. so, you had to climb a mountain to get there.